Chapter 5 in class notes.docx

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Management (MGS)
Course Code
Michael Krashinsky

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Chapter 5- Intl Business ( part 1) LEC 08 Principle Points: Explain what it is, why we do it, benefit- ON EXAM Intl trade- what it is/why it esicts Canada is “open” economy Important of trade to Canada NAFTA Competitive Advantage (Theory) Imports and Exports International Business – Defined “Business activities that involve exchanges across national boundaries” e.g.: Canadian business selling to US customer Swiss business selling to Cdn. Customers International Business – Why? Canada is an "Open Economy" Canada is: “open” to trade “open” to flow of goods & services across border Because: it raises living standards Canada is Major Player – Exports Canada is #11- at $393 China is #1- at $1897 billion Largest economy “by far” was USA- what we said weeks ago a total USA GDP of 15 trillion dollars A total USA Exports 1.5 trillion ( only 10% of stuff made is sold to foreigners) rd Even though biggest economy, only 3 largest exporter Biggest is china, at 1.8 trillion, with half the size of economy of USA Chinese sell twice as more stuff relevant to the Americans 2 largest- Germans- open economy – why? Their cars are everywhere, they are members of the EU EU is a legal agreement for 25 countries- no trade barriers- one quarter of size of USA, exports more stuff, and export to other countries in the EU Cnd GDP (recent guestimate) 1.5 trillion dollars- total size of Cndian economy = exports are 26%- 30% more than a quarter of our GDP is generated by making stuff here and selling to foreigners If we didn’t trade, 26% less ppl would not have jobs Cndian exports- 393 billion dollars- Canada’s Biggest Customers Exports 2011 Imports 2011 $ billion $ billion USA 330 281 UK 19 10 Japan 11 9 Trade = approx. 30% of Cdn GDP Canada’s Export Customers 70-80% to one big customer- and were not doing good enough job of selling to other economies- problems for Cndian economy NAFTA- legal treaty/contract North America Free Trade Agreement Canada, USA and Mexico -reasons for selling stuff to USA: they are a huge economy, very close to us, and share the same language 450 million people no barriers
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